Blockbuster and Netflix

Follow-up on the DVD rental racket:

Blockbuster has announced that they will have a new unlimited plan for $9.99.

Someone else wrote about the caveats.

1. No new releases. This is the biggest drawback. I think a lot of people would have been willing to pay as much as $20 or $25 for a plan that included new releases. But, since Netflix streaming likely won't have new releases either, this may not be a dealbreaker.

2. No Blu-ray discs. Since we got a Blu-ray player, it bugs me that Blockbuster charges a buck extra for Blu-ray rentals, since buying Blu-ray discs is only marginally more expensive. Not including even older movies on Blu-ray in the monthly pass seems kind of cheap. Annoying, but not a dealbreaker.

3. You can only have one disc out a time. This is the least onerous restriction, I think. Number of discs is a big deal for DVD-by-mail services like Zip.ca, because you often have to wait a long time for each disc to arrive in the mail. That's not an issue with Blockbuster. Once you're done watching one movie, you can go get a new one that same day.

I still think rental kiosks outside their store may be more lucrative.

All of this is being done in anticipation of Netflix operating in Canada. While the U.S. company does not plan on renting videos via mail like Zip.ca, it intends to stream videos directly to homes.

This was Rogers reaction:

Shortly after the online movie rental company Netflix said it would begin offering service north of the border, one of Canada’s largest Internet providers sliced the amount of data its subscribers can download each month.

On July 21, two days after Netflix announced it would offer a Canadian version of its wildly popular and industry-disrupting service starting in the fall, Rogers Communications Inc. changed two of its Internet plans: While prices are not dropping, new users of Rogers “lite” and “extreme” Internet service now have a stricter download limit.

Consumer advocates have spoken out against Rogers’ move, saying it was an anti-competitive action designed to cripple the business model of a potential rival in the online video rental world by making users less able and willing to stream movies online, which take up a lot of bandwidth and could lead to “overage” charges for exceeding capped limits. On the “lite” package, users are charged $4 per gigabyte to a maximum of $50 in one month.

Yeesh, talk about trying to kill the competition while lining your own pockets.

Blockbuster still has opportunities if Netflix doesn`t go with mail and Rogers chops download limits. However, they have to start offering even more competitive service.



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